Storage
All digital cameras write to flash memory, rather than film. The advantage of a removable flash memory card is that images can be viewed, kept, or replaced on the spot. Most cameras have built-in memory, but this tends to be very limited and capable of storing only a few images at the lowest resolution.
Flash memory is different to standard RAM memory because it reads and writes information in blocks, rather than in bytes. Reading and retrieving from these blocks make it easier for the system to update information as it loads up. Flash memory is often used to house control code, such as the Input/Output system in the BIOS chip in your PC, but has also developed into a removable storage format for a variety of digital devices like digital still and video cameras and audio players.
Removable storage media cards used in digital cameras come in five main formats: CompactFlash, xD-Picture Card, Memory Stick, Secure Digital and MultiMediaCard (although this latter one is becoming less common). While the differences in performance between these storage technologies is not enough to warrant purchasing one type over another, users should be aware that digital camera manufacturers have opted for one particular media type for their range of products, and that the various media types are not interchangeable (with one exception: you can use MultiMediaCards in SD slots, but not vice versa).
Unless you want to juggle a bunch of memory cards in competing formats, find out which memory card the digital camera uses, and whether you can use that same type of card in devices you already own. Most companies these days elect to use Secure Digital cards (SD), although certain companies like Sony prefer to stick with their proprietary format (Memory Stick in this case). Additionally, if you want to be able to swap media cards with friends, it will be worth your while to do a bit of homework on what types of memory are supported in which devices.
Each storage type also comes in various sizes, anywhere from 16MB up to 8GB or 16GB. Having a good idea of how many pictures you plan on taking, as well as the quality of those images (for instance, if you want to be able to print all of your pictures versus taking e-mail happy snaps), should also influence your final decision.
To give you an idea of how many images can be stored on media cards, a typical 5 megapixel compact will produce shots that are about 1.2MB, so you could get around 200 or so on a 256MB card. If you're capturing shots at 8 or 10 megapixels however, they will be more like 4MB or 5MB and will take up considerably more room.
The price of the memory cards, of course, will factor into your decision as well, as some are cheaper than others, but generally these days flash memory is cheap enough that this won't be a limiting factor.
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